Arts Desk

Why Is the District Busting Record Stores and Vintage Shops?

Crooked Beat

Should stores that sell records, vintage clothes, and used books be regulated in a manner similar to pawn shops? The District code seems to say so—which is what some small-shop owners found out, rather unpleasantly, earlier this week.

On Wednesday, an inspector from the Department of Consumer and Regulatory Affairs and a detective from the Metropolitan Police Department took a stroll through Adams Morgan and the 14th Street NW area, stopping by Idle Time Books, Smash Records, Crooked Beat Records, vintage shops Meeps and Treasury, and GoodWood, an "American mercantile and dry goods store." In each case, they told employees that without a secondhand business license, they were operating illegally and faced steep fines until they complied with the law. They'll have to get criminal background checks, a requirement for the license. And that piece of paper will cost them more than $700. The inspectors gave the businesses seven days to comply.

At Idle Time, the MPD detective, Avis Johnson, asked manager Adam Schaeffer if a book she was holding was used, Schaeffer says: "I said, 'yeah, it’s a used book store.'" He says they asked him for his secondhand business license—which, he says, the shop's owners never told him about. Instead, he pointed to the store's general business license. He says Johnson and the DCRA inspector, Terrell Hill, "started using this farcical good cop/bad cop routine. It was rude and unusual and bizarre in the extreme…I just didn’t have any information to give them."

Cathy Chung, the co-owner of Meeps and Treasury, wrote to DCRA Director Nicholas Majett, Ward 1 councilmember Jim Graham, and Kristen Barden, the executive director of the Adams Morgan Partnership BID:

I received a similar shockingly unpleasant visit when I experienced an interrogation by Mr. Hill about the same "secondhand business license." Ms. Johnson had a more "pleasant" approach but neither of them could tell me where I could find information about this law (I even showed them the DCRA web posting referenced below to discuss it and they just scoffed at me) or who I could speak to at the DCRA. They just told me I would be fined several thousand dollars. Then they visited me a second time to amend that statement, and in front of a customer, pulled me aside, and Mr. Hill informed me actually that I had seven days after the notice to be compliant. Why they didn't tell me that the first time is a mystery. Then he proceeded to tell me "that is, unless you have a criminal record, do you have a criminal record?" The customer heard everything and was appalled.

I had informed both detectives that I was the owner at Treasury as well and let them know that we did NOT have the secondhand license at either location. Did that prevent them from going to my other store less than an hour later and interrogating my employee? No, it didn't. I was afraid of this and had told her they were coming and to show them the licenses we did have, let them take their pictures of the licenses, let them know I had already spoken with them, and to call me with any issues. I thought that this would prevent an altercation. They screamed so hard at her that the employee was shaken when I spoke to her about it. What is the point of this during a business day? It's disruptive and unprofessional and inhuman. And it comes across as merely a scare tactic when I had ALREADY spoken to them regarding both businesses.

"That's something we're going to look into," says Kevin Carter, the supervisor of DCRA's Regulatory Investigations Division, when asked about his employee's alleged behavior. "Compliance inspections are generally noncontroversial. We don’t go in and shut them down."

In an email, Gwendolyn Crump, the director of MPD's communications office, writes: "MPD assisted DCRA. Please direct your inquiry to them." But Carter says DCRA was first notified of the compliance issues by MPD's pawn unit.

Carter says the inspections concluded that all of these businesses should be operating under a secondhand business license and not the less restrictive general business license. If he's right, that means each of the inspected businesses has to fit into one of these three categories of secondhand businesses, according to D.C. municipal regulations:

A Class A secondhand dealer shall be a person, firm or corporation, other than a Class B or a Class C secondhand dealer, engaged in the business of buying, selling, trading, exchanging or dealing in secondhand personal property of any description (other than motor vehicles), including the return or unused portion of any railroad ticket, order or token.

A Class B secondhand dealer shall be a person, firm or corporation primarily engaged in the sale of new merchandise, and incidentally engaged in selling, trading, exchanging or dealing in secondhand personal property of any description (other than motor vehicles) as the result of having received that secondhand personal property in trade, or by repossession or as part payment for new merchandise.

No Class B secondhand dealer shall engage in the business of dealing in used personal property except as an incident to the sale of other merchandise.

A Class C secondhand dealer shall be a charitable organization, as defined in § 501(c)(3) of the Internal Revenue Code of 1954, which purchases or receives secondhand personal property (other than motor vehicles) for the purpose of resale; or a person, firm, or corporation which purchases or receives secondhand personal property of any description (other than motor vehicles) on consignment for the purpose of resale.

The first category seems broad enough to include businesses like Crooked Beat and Smash, which sell mostly new records but also some used ones; Idle Time, which sells almost entirely used books; Treasury and GoodWood, which sell vintage and antique items bought through dealers and auction houses; and Meeps, which sells clothing from dealers as well as items purchased off the street.

But there are several problems. For starters, every owner I spoke with said either they were never told by DCRA that the secondhand business license existed, or they were told specifically that it did not apply to them because they bought from licensed dealers and not off the street. Bill Daly, the owner of Crooked Beat, says that when he came to the District in 2004, he explained the nature of the shop to DCRA and was told he could use the general business license. GoodWood, in fact, used to have the secondhand business license; owner Anna Kahoe says she heard from others in the vintage and antique industry that because she wasn't buying from individuals (but from dealers and auction houses) she could instead operate under the general business license. When she went to DCRA three or four years ago to make the change, she says, she explained the nature of her business and was told the general business license was fine. “I thought I was in the clear until yesterday,” she told me Thursday.

"I’m not certain why they didn’t know," Carter says. "But what I am certain of is that if they had come to DCRA or gone online, someone would’ve told them what they should have told them."

Problem No. 2: The requirements of the secondhand business license are notably onerous. In addition to the background checks, businesses have to record every single purchase of secondhand goods they make and file it with MPD's pawn unit. The idea is to safeguard against the selling of stolen goods—which makes sense when regulating pawn shops, which buy jewelry and electronics off the street. But record stores?

Problem No. 3: the cost and the timing. The secondhand business license is $651.20, and additional fees bring it to more than $700. Compare that to the general business license, which is $324.50. "This is an expensive license," says Barden, from the Adams Morgan BID. "For some people it’s a real cash-flow issue. Most people plan on paying certain licenses at certain times of the year. Getting a surprise license like this—it’s kind of unfair." Carter says that under extenuating circumstances, DCRA will allow the businesses more than seven days to comply.

Reached by email, councilmember Graham writes: "I have communicated with MPD and the US Attorney, requesting detailed information on what happened here. I am awaiting the response. I am very concerned."

While Daly's lawyer, Robert Clayton, told me his client is considering filing a restraining order if this situation isn't cleared up soon, every business owner I spoke with stressed they don't want to be in violation of the law. "We are willing to do anything we need to do to be compliant," says Chung, of Meeps and Treasury. "We just want to be shown a level of respect being a small business and doing everything we can to contribute to the local economy. We’d like the same manner of respect in return."

Photo by Darrow Montgomery

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  • AM Next

    This is DC's idea of small business development:

    Impose absurd rules and reporting requirements; extract huge license fees; assume every merchant is a crook; employ shake-down tactics arbitrarily.

    These merchants should resist this!!

  • Lisa

    I've heard of this before, but several store owners that have advised me over the past few years seemed to believe that it might apply to consignment shops, but not vintage or secondhand resale shops.

    I'm sure none of these stores in question hid the nature of their product when they went to apply for or renew their BBL. If this is a policy change, you'd think everyone could have more than 7 days notice and you know, maybe a letter in the mail?

  • BADKarma

    This is called the run-up to forcibly seizing and shuttering any business deemed not large enough to be worth nationalizing. Welcome to the USSA, boys and girls. Get used to it, particularly if you're stupid enough to give His Exalted Presidency a second term.

    Incidentally, does anyone else find it "coincidental" that every business thusly harassed was featured in a recent American Express ad touting the virtue of small businesses?

  • neel

    this is what hipsters get for being Liberal Big Government sheep. will they ever wake up and smell liberty?

  • Name (required)

    So this is DC's definition of "jobs creation". Creating jobs for Gubmint inspectors and coercive revenue enforcement goons.

  • EP Sato

    Folks are clearly missing the point of this regulation: DC has lots of thefts and robberies.

    These licenses, which I'm pretty are also required for DC's Gamestop video game stores, require used item store owners to make records of who sells them specific goods. Why would they do this? Because, if a store's selling stolen goods, it's unwittingly participating in a felony.

    More so, if you have an item stolen, and the item at the shop proves to be yours (for example, someone steals your Technique record player, or say, a rare disc with a $100+ value), the police would then have a record of who stole (and fenced) your item.

    Folks can hate all they want, but this is the fault of the store owners for not being in compliance in the first place. If the law requiring these licenses was passed after these shops opened, it's the Council's fault for not including a grandfather clause. Most likely, this law's been on the books and just hadn't been enforced previously, which means some of these stores have been violating the law for years.

  • EP Sato

    PS the DC Council's Committee on Public Services and Consumer Affairs has jurisdiction over DCRA.

    Councilmembers can introduce emergency legislation to rescind this requirement (if they want to). They can also pass laws to rescind, clarify or deal with this.

    Finally, they can hold hearings to give DCRA a hard time about this, as it's clear someone screwed something up somewhere.

    The Committee's website is:http://www.dccouncil.us/committees/committee-on-public-services-and-consumer-affairs

    You can call the committee directly at 202-724-8068

    Members on the Committee include At-large CM Mendelson, and possibly your ward Councilmember. Call them directly if you're represented by CM Graham, Bowser, Cheh or Alexander. The Council will act if there's enough public outcry over this issue.

  • Northwesterner

    The cops were asking for a bribe. I am stunned that people got confused by this and it made it into the City Paper. I managed a retail establishment many years ago and this is what the cops were doing. These naive kids then went back to DCRA or to a journalist looking for answers. There are no answers! unbelievable.

  • Drez

    Bike stores, too.
    I was told by an employee of a well known DC bike store that the reason they no longer sell used bikes is because DC told them they needed a pawn license. Sucks, IMO, especially since I was there to buy a kids' bike that I expect to only need for 2 years or so. I wanted a quality (not department store) bike and was hoping to buy used. Who the hell wants to spend hundreds of dollars on a quality bike their kid will outgrow? Oh, well, Craigslist here I come. No one ever sells stolen stuff there! And I'm sure the former owners will have cared for it!

  • ABJ

    I would have to agree with Northwesterner...when I read what the cops were doing it totally sounded like they were being asked to be paid off...a "good cop bad cop" shakedown is not standard procedure for permitting...

  • lovessoldier

    I love this "turn comments section off button". It saves me from getting pissed off at folks who blame the President and black people for the ills that impact DC regulations....

  • WhataDisgrace

    It's a shame that some reading might think these merchants are up to something shady because of this police action. Nothing could be further from the truth.

    The owners of Idle Time Books, Crooked Beat Records, Smash and Meeps are all perfect Adams Morgan neighbors and operate with the highest integrity!

  • Ike

    Anyone who blindly blames all types of "big government" for this is willfully blind. Like any liberal with half a brain, I'm against the expansion of stupid, bad government and in favor of bigger SMART government. Clearly D.C.'s government is not too smart and I'm glad I don't live there.

    If you give control of everything to corporations, then eventually it will be even harder to operate a small business, with anti-trust laws utterly destroyed and big business forcing out smaller competitors by any means necessary, including criminal means. Don't forget the lessons of history -- Standard Oil, anyone?

  • Collin Crowe

    i would gladly let someone steal 2/3 of my records or books. they're heavy, hard to move, dirty, and not worth very much.
    while i would be very upset if someone stole something in my collection of value, the likelihood of that is very low. the thief would also have to be a nerd.
    it would be much more of a robbery of its people if DC made it more difficult or impossible for institutions like "record stores" or "used book stores". these guys are not thugs, they make very little profit, and are important cultural institution of any city. i hope these are just some idiot cops trying to pull something crooked,and get bribed or something. i hope no high govt official is serious about this. when you look at the facts dc is an incredibly over regulated city, and seem to take a liking at giving honest local businesses a hard time. i've seen it so much. a terrible place to open a business, when the time comes and i open a place i'll be giving my tax dollars to another city who'll appreciate jobs and culture i'm helping foster. sorry guys this article really bummed me out.

  • http://www.beautypill.com Chad

    Why is this article attracting the right wing knuckle-drag set? How did they even find it? So weird.

    - c

  • CapitalTruck

    It is unbelievable the amount of crap small businesses get put through in this town. Let me just reference Capital City Diner on Bladensburg Rd. They had to do so much to get going over there. They were truly in Ft. Apache when it first opened. Cue the development of H St. and Harry Thomas Junior (you know, the thief) pushes through a permit to allow Dennys to open across the street. What crap man. The only businesses in this town in 10 years are national corporations. Total crap man.

  • Josh

    I was with EP Sato until the last paragraph. All of these shops explained their business to DCRA and were given the same answer--no, a second hand license did not apply given the nature of their business and the stream of merchandise. The fault is with DCRA for not knowing the law in the first place. It's a crazy bad agency full of contradictory answers, incompetents who don't know the law, and rude, obnoxious officials who bully and (in this case) seemingly ask for a shakedown.

  • nate

    This just shows what a HUGE disconnect there is between the government tax and regulation "authorities" and the real world of small businesses trying to make it at a time rents are too high for independents and margins are tight. Just when the city should be balancing the massive tax breaks given to big box stores and large scale development projects by easing the burden on independents like Crooked Beat and Meeps, poorly trained DCRA and MPD arm twisters are squeezing them for a few more dollars. It's disgusting. The small businesses of Adams Morgan bring value to this city just by their very existence. DCRA and MPD will only answer for this if small businesses, and those who appreciate them, stand up.

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  • 17th St

    This is appalling. If they're hitting on Goodwood and the others, why not the big fancy antique stores in Georgetown? Or are they are too well connected or maybe they have the resources to fight back, so these thugs are harassing on the little guys. The District should be ashamed of itself. Other posters have suggested that this kind of City behavior will result in nothing but national chains in the city in a few years, but I doubt even they will bother to enter a city with such a negative attitude toward business. Our loss will be the gain of Clarendon, Pentagon City, and Friendship Hgts, MD. I guess we can always shop at WalMart, DC.

  • http://www.reverbnation.com/colorschool Jerry H

    If DC has an issue, they should direct their conversations to owners of the establishments. For a DC official and investigator to bring up any regularoty issues to an employee is completely bush league, inappropriate, unethical, unprofessional, and basically harrasment of hourly employees. Cowards.

    By the way... How were they dressed?

  • randy

    my father is a small business owner in dc. the dc government regulators are notoriously corrupt and will try to extract fines for non-compliance of vague laws that aren't listed anywhere. then when you try to go downtown to deal with the new paperwork, the people are taking breaks, talking on their cellphones, and basically not helping any dc residents at all. there is a reason why my father is taking his business out of the city and if the city wants businesses to stay it's going to have to change the climate of corruption.

  • seeseehpounder

    As noted by other posters, this classification is necessary to avoid buying stolen goods from people on the streets. Background checks are necessary because you don't want shady people buying the stolen goods from the streets and turning around to sell to the public. These stores are buying from Dealers and Auction houses so the people they are buying from should have these liscenses not them.

    It's funny, with Adams Morgan being as lawless as it is every weekend the cops are worrying about some used book stores and records shops? Seems the cops just want more drunk kids wandering the streets and buying jumbo slices. Sober used book buyers remember to feed the meter, don't get drunk in public citations, and probably don't start too many fights.

  • Straight Edge Forever

    I'll never vote for Vince Gray again. And nice of the police to refuse comment.

  • anon

    I don't think a record shop dealing in used merch is synonymous with a pawn shop, but any record store that moves any kind of volume of used merch would be well advised to follow some of these requirements on principle -- even with the popularity of streaming music, CDs are still a popular theft item and relatively easy to both boost and move for cash. If nothing else, IDing sellers is a good idea and shows the stores don't want to be complicit in ilicit trade (which from my experience they don't).

    I wonder if these regulators would take such a hard line with the newly popular childrens clothing consignment shops popping up in some areas? Or how about the Eastern Market weekend flea market?

  • Sydney

    New York Times Magazine:

    Q. What's the easiest way to cheat on your taxes?

    A. Run your own company.

    Most businesses in DC are not licenses and do not pay any kind of tax. (Think tens of thousands of condos and row houses rented out.) With a little enforcement, the city should never have a revenue problem. And cheaters would get to be honest. Win-win!

  • http://backgroundcriminalrecord.org/ Hasan Taimur

    Very good work by the policeman and district code is nothing but joke.

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  • Mr. Remember

    Oh I have my run-end with Terrell Hill during my days affiliated with a high-school on Capitol Hill. Where DCRA wanted to regulate a high-school fundraising activity. It was more than bizarre, it was quite outrageous. The irony of this when we as the PTSA contested the actions all sudden the DCRA hierarchy was revamped/removed because of issues.

  • http://www.tinyurl.com/hotel-feedback AdMo4RD

    This is amazing... a corporate developer gets a 46 million dollar tax gift from Jim Graham and the City so to bring the Marriott Edition luxury hotel tower to Adams Morgan, but small biz gets the stick?

    http://www.tinyurl.com/hotel-feedback

  • just sayin’

    I only wonder one thing - does Weschler's have the proper license or not?

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  • s’il muove

    Cathy Lanier has now decided to use her detectives to intimidate sales clerks??! THAT is what we're paying for, and what she thinks is the best deployment of detectives in this city? She apparently needs some re-education, and/or to stop taking her staffing orders from Nicky "The Tool" Majett.

    Sure is a good thing there's no real crime in this city, I guess.

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